One of the main reasons people pursue filing for bankruptcy is to gain control over a financial situation which they have been unable to control on their own. Part of the financial struggle for many individuals involves keeping up with a mortgage payment. It is not unusual for people on the verge of filing bankruptcy to also simultaneously be in the middle of the home foreclosure process. Before a Florida homeowner begins the bankruptcy process, he or she should be aware of how it may affect home foreclosure proceedings, now and in the long-term.
First and foremost, there will be automatic stay of the foreclosure process once bankruptcy is filed. This gives a homeowner time to devise a plan and choose the best option concerning a home. However, if you are severely behind and a lender feels you may not be able to get current, that lender can still ask the Bankruptcy Court to move forward with the home foreclosure process.
For those who feel they can catch up on payments if given enough time and wiggle room after other debt is handled accordingly, Chapter 13 bankruptcy may be the best option. This can give a homeowner up to five years to get current and pay back due mortgage payments. Chapter 13 is essentially a repayment plan approved the the court with a time period set for making specific payments.
After a bankruptcy has been filed in Florida, knowing how it may affect home foreclosure is crucial. One important consideration is the application of Florida’s homestead exemption law to the bankruptcy process. Our website offers more in-depth information about how bankruptcy may impact the home foreclosure process, dependent on your individual situation.